The recent UN climate summit in Glasgow disappointed many, but the message is clear for SMEs: acting on the environment is good for the planet, and business.
If there was one piece of coverage that summed up the COP26 climate summit in Glasgow, a tearful Summit President Alok Sharma was probably it. But while Sharma was understandably upset at the lack of progress of the talks, businesses – and SMEs in particular – should already be tackling their emissions, and for their own sake.
Many, of course, already take Net Zero seriously and investing in technology that helps
As well as the regulation they will likely face over the coming decades, businesses need to invest the time and resources into becoming Net Zero now, for three key reasons.
1. Large customers will start to look at your emissions
No business operates on its own, and so too with emissions. When it comes to lowering their CO2 output, many large organisations will have started with things like their own fuel consumption and whether the electricity they use was sourced from renewables. These are known as Scope 1 & 2 emissions, but increasingly, organisations are looking at Scope 3 emissions, which includes purchased goods and services in their supply chains. So SMEs looking to supply larger clients can expect some kind of audit that looks at its energy usage and emissions around things like company cars. Indeed, joining a supply chain nowadays may well involve some kind of initial assessment of your green credentials. Household names noted in recent years for their focus on Scope 3 include BT, Microsoft, M&S and Primark.
2. The younger generation wants to work for green businesses
Forming an ever growing proportion of the labour force, consumers and investors, Millennials and younger workers are increasingly able to excerpt their views on the climate on to businesses. Research by Fast Company suggests that 70% of the younger workforce would be more likely to work at a company with a strong environmental agenda than one that doesn’t. And 30% said that they’ve left a job in the past because of their employer’s lack of a sustainability plan. With such a mindset, it’s clear that businesses face the immediate problem of hiring and staff retention if they lack a credible sustainability plan, and may struggle to attract consumers for similar reasons.
3. Doing the right thing means investing wisely
Businesses don’t need to have an ulterior motive for acting on the climate: for many it is simply the right thing to do. Where a business starts its journey toward Net Zero will be incredibly nuanced and individual, but regardless of what is to be done, many leaders will find that while the spirit is willing, the diary isn’t. Our research shows that 35% of businesses would like to know more about how they can act as a business to move to Net Zero, and we suspect that they simply lack the time and focus to take Net Zero seriously currently.
Fortunately, for the environment as well as time-poor managers, the growing number of climate consultants means a ready supply of qualified professional who can step in to conduct an energy audit and to create a plan of where to start and what to do. The likes of McKinsey and Accenture aim to help larger businesses, but plenty of consultants gear themselves for SME-sized clients too. And financing the cost of implementing environmental changes can be covered by a Capify business loan.
A sobbing Alok Sharma might be the enduring image of COP26, and his salty tears will do nothing for rising sea levels, but the enduring message is clear: start now, invest and take advantage of becoming green.
In our series of articles looking to help SMEs start their Net Zero journey, we will show you the tricks to investing wisely so that your business isn’t left behind.